A Sumner property owner has abandoned plans to build two apartments after being hit by a $72,000 fee from the Christchurch City Council.

The shops at 21 Marriner St are being demolished because of earthquake damage.

Architect Bruce Banbury said the overseas land owner was interested in investing more in Sumner, and considered adding two apartments above the shops as part of the rebuild.

However, a development contribution of $36,000 per apartment had changed his mind.

"His attitude was, if the council is sticking its hand out for $36,000 per apartment, it just isn't worth it," Banbury said.

"Shouldn't the council be supporting development?"

Developer contributions were adopted by many councils in 2004. The fees passed some infrastructure costs, including roading and water supply, on to housing and commercial developers.

Contribution fees are on top of building and resource consent fees.

Banbury said that while the contributions could be appropriate for large-scale developers, small projects including 21 Marriner St could be crippled.

"I feel really sad about this not going ahead," he said. "I understand the council is cash-strapped, but it's not a good way of getting things going again."

By the time the landowner paid for the build, consents, developer contributions and fees on selling the apartments, he would not get much of a financial return for his trouble.

Banbury said he was designing an attractive replacement shop complex without the apartments, including grassed areas and verandas. However, he said the property would not achieve its full potential without the apartments.

Council strategic policy manager Alan Bywater said the contributions were calculated on a case- by-case basis. The $36,000 estimate for Marriner St was "worst-case scenario".

Bywater said if developers were not charged, ratepayers would probably bear the brunt of the cost. The contributions aimed to limit the cost to the person directly profiting from the development.

Residential land developer Hamish Wheelans said the council was using developers as a "cash cow" to fund its rebuild budget shortfalls.

"This is not meant to be an opportunity for council to levy fees to create something like a cemetery," he said.

Wheelans said the council made it particularly difficult and costly for developers.

He said it was too easy to take his projects to Selwyn, where the council was proactive about supporting development.

Wheelans said he accepted the contributions were necessary, but felt the legislation was being exploited in Christchurch.

Housing Minister Nick Smith said in the last decade the average national developer contribution had gone up from $3000 to $14,000, with some councils charging as much as $64,000 per section. Smith said the fees were having an impact on the affordability of housing.

A bill was before Parliament, which aimed to cap developer contribution charges and limit what councils can charge for.